Thomas Daniels
Stablecoin startup Tether recently froze 41 wallets, with on-chain analysis revealing that several of these cryptocurrency wallets utilized Tornado Cash services. Tornado Cash is included in the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) list.
Tether’s decision to suspend these wallets’ operations was based on information from blockchain intelligence firm Chainargos.
Etherscan, a tracker for Ether cryptocurrency transactions, identified one of the addresses as being potentially involved in the notorious Ronin Bridge hack. The collectively frozen virtual wallets predominantly transferred funds in Staked USDT (STUSDT).
This is not the first instance of Tether freezing wallets connected to conflict situations. Previously, it halted the operations of 32 wallets associated with conflicts in Ukraine and Israel, holding a total of $873,118, as reported by CNBC.
In October, Tether announced collaboration with 31 agencies across 19 countries, aiding in the freezing of nearly $835 million in assets linked to illegal activities. Additionally, in November 2022, Tether complied with a legal request to freeze $46 million in USDT, reportedly owned by the troubled crypto exchange FTX.
On December 1, 2023, Tether agreed to implement a wallet-freezing policy, augmenting its existing security protocols. The new policy aims to prevent transactions by individuals and entities on OFAC’s SDN list.
The startup emphasizes this policy as part of its commitment to cooperating with global financial regulators and law enforcement. Tether also intends to provide its secondary market customers with the same level of sanctions control that it applies to wallet activities on its platform.
Paolo Ardoino, CEO of Tether, stated that this strategic move is in line with their dedication to upholding the highest security standards for their global ecosystem and strengthening their collaboration with international law enforcement and regulatory bodies.
Using this policy, Tether has been actively freezing wallets added to the SDN list, as the U.S. Treasury employs this list in its efforts to target crypto wallets involved in illegal transactions.
